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Feb 21, 2024
, BNN Bloomberg
A new survey suggests economic challenges have not dampened Canadians' enthusiasm for the housing market.
NerdWallet Canada’s 2024 Canadian Home Buyer Report, released Wednesday, found 49 per cent of Canadians plan on buying a home within the next five years, though most appear willing to wait out the high interest rates, as only 11 per cent plan on buying in the next 12 months.
“Though it’s not entirely realistic, the strong desire to buy speaks to how much Canadians value owning their own home,” Clay Jarvis, NerdWallet’s mortgage and real estate expert in Canada, wrote in the report.
Though high real estate prices and interest rates present significant barriers to homeownership, the survey shows down payments may also be an issue.
The report found that just 16 per cent of Canadians planning to buy a home with a down payment have begun saving for it.
“Saving any money in the current economic climate is a cause for celebration, but many home buyers will need to greatly increase their down payment savings if they hope to get approved for a mortgage,” the report states. “This is especially true for Canadians aged 18-34 who plan to buy a home in the next five years, with 21 per cent of this cohort saying they have not started saving.”
Under Canadian guidelines, home purchases require a five per cent down payment at minimum, while homes sold for more than $500,000 require a minimum payment of five per cent for the first $500,000, and 10 per cent for the remainder.
Under these guidelines, Canadian Real Estate Association’s average home price for December -- $657,145 – would require a down payment of $40,715.
While nearly half of Canadians are looking to buy, it appears Canadian homeowners are equally eager to sell.
The survey found 42 per cent of Canadian homeowners plan to sell within the next five years, which would still shut millions of expected home buyers out of the market, excluding new builds and immigration.
For those considering selling their home, the current economy is less of a concern, as 31 per cent said they plan to downsize, while 24 per cent are looking for a change of scenery and 20 per cent are looking to upsize.
This survey was conducted online within Canada by The Harris Poll on behalf of NerdWallet from Jan. 17 – 19, 2024 among 1,015 adults ages 18 and older. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 3.8 percentage points using a 95 per cent confidence level.
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